1. What Happened? Dongyang Steel Pipe Announces Rights Offering!

Dongyang Steel Pipe has decided on a rights offering to raise 50 billion KRW for operating funds. The offering will be conducted through a rights offering to existing shareholders, followed by a public offering of any unsubscribed shares. The subscription ratio is 0.3 shares per existing share. Details are as follows:

  • Amount: 50 billion KRW (Operating Funds)
  • Method: Rights offering, followed by public offering of unsubscribed shares
  • Ratio: 0.3 shares per existing share
  • Record Date: October 28, 2025
  • Subscription Date: December 4, 2025
  • Payment Date: December 11, 2025
  • Listing Date: December 26, 2025

2. Why the Rights Offering? Background and Objectives

Dongyang Steel Pipe recorded an operating loss in the first half of 2025. The main cause is a significant decrease in sales in the steel pipe segment due to the sluggish construction market and decreased SOC investment. The rights offering is analyzed as a measure to secure operating funds and improve the financial structure under these circumstances.

3. So, What About the Stock Price? Analyzing Positive & Negative Impacts

Positive Impacts:

  • Mitigation of short-term financial risks and securing management stability by securing operating funds.
  • Possibility of improving financial structure through capital increase.
  • Securing investment resources for future growth engines.

Negative Impacts:

  • Stock dilution due to the rights offering.
  • Possibility of increased cost of capital.
  • Contraction of market sentiment and deterioration of investor confidence.
  • Increased concern about stock dilution along with the exercise of conversion rights for convertible bonds issued in 2023.

4. What Should Investors Do? Key Investment Points & Action Plan

Investors should consider the following factors when making investment decisions:

  • Use of Funds: Check how the raised funds will be utilized and how they will impact earnings improvement.
  • Industry Trends: The recovery of the steel pipe and copper alloy industries will significantly influence Dongyang Steel Pipe’s performance.
  • Impact of Convertible Bonds: Consider the impact of convertible bonds on the stock price.
  • Macroeconomic Environment: Monitor macroeconomic variables such as exchange rates and interest rate fluctuations.

In the short term, stock price volatility may increase, requiring a cautious approach. In the long term, the company’s earnings improvement will determine the stock price direction. This analysis is for investment reference only, and all investment decisions and responsibilities lie with the individual investor.